Archives

Surprise! Your competitor is about to upstage your new product

Sometimes unexpected signals about competitors pop up during conversations we have with prospective customers about our client’s new product idea. After we verify and expand a signal, our client can evaluate an effective response to the competitor’s signal.

Occasionally the proper response is benign neglect.

The competitor is going down a path where the client has found earlier that a critical mass of repeat users can’t be built. In such cases a wise response is neglect, let the competitor tie up their assets in a worthless venture.

In other cases the competitor has identified an unforeseen opportunity in a mature market.

When launched the competitor’s new offering provides major benefits to customers and they will substitute it for current offerings.

Below is a case study where my client used signals of an unforeseen opportunity to counter the competitor’s launch and preserve global market share.

Case Study: Satisfying a latent need in a mature market

The client, a European-based multinational, is preeminent in the product category in its home market. They made the product by mixing specialty ingredients with large volumes of two commodity components. It had lightly used production capacity in North America and wished to gain share there.

Based on information from their sales force, the client planned to introduce a version of their current offering containing a new specialty component. They hired me to elicit the expressed and latent needs customers in North America would expect the new version to satisfy.

Twenty-two interviews with prospective customers collected valid needs the client’s technically advanced idea could satisfy. They liked the new feature.

In line with the Rule of 40 for gathering statistical information, I continued on to interview the twenty-third prospective customer. I got a major surprise from this customer, information unknown to the first twenty-two or to my client.

My source there, an operating engineer, was blunt. He said he did not need my client’s advanced version and “in six months we are not going to buy this product from anybody.” After more conversation I learned that at his plant a unit, designed by the competitor, was being built to produce the product on-site.

Besides designing the unit, the competitor would supply a simple set of specialty ingredients. The two high volume commodity components were available as byproducts of a product made at the plant site. Without shipping charges for the large volume commodity components, on-site production was projected to be one-third the cost of current offerings.

In seventeen more interviews with prospective customers I learned that: 1. Without knowing the “how-to” details, they had a latent need for a large decrease in cost, 2. A “plain-vanilla” product missing some of the specialty ingredients was OK.

I got building plans for the on-site unit from the local government agency reviewing construction of the unit. Two months after completing my interviews, the client had a similar on-site unit running at a cooperative customer’s site in Europe. Now, fifteen years later they’ve kept their preeminent position in Europe and improved their North American share.

Distinguishing signals from noise involves both skill and experience

Since 1985 I have, through elicitation, unearthed fresh insights about …